Most investors did relatively well out of the UK privatisation boom. Companies such as BAE Systems or BG Group are currently trading at more than six times their IPO prices of 1981 and 1986 respectively.

Now countries in eastern Europe are selling off their state-owned assets and the early signs are that, if you are prepared to take a risk, potential gains can be made.

The Polish government has published a list of more than 20 major companies it intends to privatise on the Warsaw Stock Exchange over the coming years.

To encourage Polish nationals to invest in the stock market, the government is offering incentives such as bonus shares or discounted prices.

However UK investors, by virtue of being EU citizens, can also participate and benefit from any privatisation incentives.

So far Poland's programme has proved hugely successful. Katrina Tarizzo, who has helped organise the scheme on a model she used for French privatisations in the mid-1990s, says that "where once the Polish queued for bread, they are now queueing for shares".

Since the privatisation programme started in November, five companies have come to market: Bank PKO is now one of the largest stocks on the Warsaw exchange. The other privatised companies are WsIP, a publishing outfit; Dwory, a chemicals company; Zelmer, which specialises in appliances; and chemicals company CIECH.

With the exception of Dwory, all showed opening premiums, of more than 20 per cent. Bank PKO is now 37 per cent up, while Zelmer is at a 28 per cent premium to the offer price. Premiums at the others range from 1.8 per cent (Dwory) to 2 per cent (CIECH).

Private investors have the added perk that if they hold their stakes for at least 12 months, in some cases, they can get 5 per cent more in bonus shares.

Investing in Polish privatisation stocks is not straightforward, however. You have to open a bank account in Poland as well as appoint a broker. For the broker to act on your behalf, you have to sign a power of attorney (in Polish) and pay stamp duty on it. When you bid, you have to pay the full amount you are applying for in Polish Zloty (you may only get a small percentage - many of the IPOs have been heavily oversubscribed).

There are though some schemes to do all the legwork for you. But at a cost.

Keydata, a structured investment product provider, will invest in all the upcoming privatisations for you. Keydata charges up to 8 per cent as an application fee, depending on how much you invest. Also, you can only invest between £2,000 and £10,000. There are also brokerage fees for selling the shares.

Justin Modray, of financial advisers Bestinvest, will only advise the scheme as "a wildcard punt". For the more risk-averse, he recommends Jupiter's Emerging European Opportunities fund which has a 15 per cent exposure to Polish equity markets.

Mohamed Abdel-Hadi, a Polish equities analyst at Merrill Lynch, thinks it pays to be selective with the privatisations. Of the 36 Polish IPOs last year (which includes IPOs not part of the privatisation programme), the average return has been just 3 per cent, he says.

Currency risks should also not be discounted. The Polish zloty has improved against the dollar recently, but experts predict it may now level off, or even be somewhat volatile in advance of preparations to join the ERM.

Abdel-Hadi says the equity market in Poland looks promising. The Warsaw stock exchange currently trades at around 14 times 2005 earnings and he expects it to rise 29 per cent in 2005, and 10 per cent in 2006.